Foreclosure in El Paso>Question Details

alxseg, Home Buyer in El Paso, TX

Bank not taking possession of a property through bankruptcy? (Texas)

Asked by alxseg, El Paso, TX Mon Feb 24, 2014

A property was purchased from a HOA foreclosure auction last year. We had never purchased anything like this and did it on a gamble. Come to find out that the owners (who were listed in the HOA suit) had filed for bankruptcy about 4 years ago, and this property was shown to be given back to the bank in the bankruptcy results. The lawyer for the HOA says that the bank never took possession and when the HOA tried to sue the bank in their lawsuit the bank said it did not own the note anymore (it had sold it to another bank) and the bank's attorney withdrew. The HOA attorney says that the court made the determination that the homeowners owned the home.

No payments have been made on this home for years it seems like. Now we 'own' it but it needs some work to be habitable, so we don't want to invest anything if the bank is going to take it away. But it's going on over 5 months now that we have it and it's just sitting there empty.

Thoughts?

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3
RonS’s answer
You don't "Give" a property to the bank. The borrower surrenders the property but that only means they aren't going to pay on it any longer. The trustee can abandon the property so that the bank can foreclose if they choose to do so.

I'm confident that unless there is a foreclosure on record, some entity owns it and will eventually come out of the woodwork. The lien will survive any chapter 7 regardless of whether it was surrendered or not. The liability for the debt is gone in the BK but again, the bank (Or other legal owner) will have to foreclosure to exercize their rights.

If the HOA foreclosed, they did so subject to the right of the senior lien holders, and junior lienholders for that matter. Their rights were not wiped out in the foreclosure by an HOA.
0 votes Thank Flag Link Thu Feb 27, 2014
@Alxseg - I guess it depends. You can do whatever you want for all intents and purposes. The issue might be that they come back some day and assert their rights. They being whomoever can document that they are the legal owner/lienholder. I'm not sure i'd want to remodel a home and get all comfortable without having clear and marketable title to a property. That's too scary.
Flag Tue Mar 11, 2014
I guess my question had more to do with "what can be done if the bank does never forecloses?"
Flag Thu Feb 27, 2014
Yes you're right, I've learned a few things after researching this further...thank you.
Flag Thu Feb 27, 2014
Michael is right on. Contact a qualified real estate attorney.
1 vote Thank Flag Link Mon Feb 24, 2014
I think that this question can only be answered by a competent attorney who specializes in such matters. There are a lot of complicated dynamics going on here.

Your attorney will want to review your purchase agreement along with any title insurance that you may have received.

I can provide you with the names of a few attorneys that you may want to talk to.

Good luck!
1 vote Thank Flag Link Mon Feb 24, 2014
Thank you yes I'd appreciate the names of some. We have contacted a few but the property is in a very exclusive neighborhood and the attorneys we talk to would have conflicts with the HOA.
Thanks again.
Flag Tue Feb 25, 2014
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